HR-6726 : Still Just a Bill

H.R. 6726, titled "To amend the Housing and Urban Development Act of 1968 to provide reforms to housing counseling and financial literacy programs," proposes several changes to federal housing counseling initiatives. The key provisions of this bill include:

• Grant Distribution: Modifies the criteria for distributing housing counseling grants, requiring that recipients be geographically diverse and include organizations serving both urban and rural areas, rather than focusing on demographics or foreclosure rates.
• Performance Reviews and Counselor Competence: Mandates that the Department of Housing and Urban Development (HUD) conduct performance reviews of all participating counseling agencies to ensure program compliance. It also authorizes HUD to assess the competence of individual pre-purchase housing counselors, potentially comparing their clients' mortgage default rates to market averages. Counselors found to lack competence may be required to undergo further education, retesting, or face permanent suspension of their certification after repeated failures.
• Termination of Assistance: Establishes a formal process for HUD to deny renewal of assistance to organizations or entities that fail to comply with program requirements. This process includes providing a 60-day written notice and offering an informal conference for the organization to present factors that may have contributed to non-compliance.
• Foreclosure Mitigation Counseling: Requires that borrowers who are 30 days or more delinquent on payments for certain types of mortgages (including those insured by the Federal Housing Administration, Department of Veterans Affairs, or Department of Agriculture) be offered the opportunity to participate in available housing counseling.
• Counseling Cost Coverage: Specifies that, under certain conditions, the cost of counseling for delinquent borrowers with Federal Housing Administration-insured mortgages shall be paid for by the Mutual Mortgage Insurance Fund.